The government and ASIC are demanding banks and financial service providers strengthen their scam and fraud defences. With this nefarious activity costing Australians $318 million in the past 15 months alone, the industry’s positive response has not come quickly enough.
With industry funds feeling the heat from APRA, it’s likely more members will look for a better option, especially if they are nearing or in retirement. Those choosing to do so need to tread warily.
Grattan Institute urges hefty increase in rent assistance
The Federal Government needs to urgently increase the maximum rate of rent assistance by 50 per cent for singles and 40 per cent for couples, according to the Grattan Institute, an independent think tank.
In its detailed report into the rental crisis facing retirees, titled Renting in retirement: Why rent assistance needs to rise, it also suggests rental assistance be indexed to changes in rents for the cheapest 25 per cent of homes in capital cities.
“International experience, and Australian evidence, suggests that more than five in six dollars of any extra rent assistance paid would benefit renters rather than landlords,” the report’s author, Brendan Coates, Matthew Bowes and Joey Moloney, write.
“These increases would boost the maximum rate of rent assistance by $53 a week ($2,750 a year) for singles and $40 a week ($2,080 a year) for couples.
“This would ensure single retirees could afford to spend $350 a week on rent, enough to rent the cheapest 25 per cent of one-bedroom homes across Australian capital cities, while still affording other essentials. Retired couples could afford to spend $390 a week on rent, enough to rent the cheapest 25 per cent of all one and two-bedroom homes.”
Currently the maximum payment for a single person is $211.20 a fortnight, while for couples it’s $199 a fortnight.
The government has lifted the maximum rate of rent assistance by 27 per cent – over and above inflation – over the past two budgets.
But even after these increases, a single retiree who relies solely on income support can afford to rent just four per cent of a one-bedroom home in Sydney, 13 per cent in Brisbane and 14 per cent in Melbourne after covering basic living expenses. And with rent assistance indexed to inflation, rather than recipients’ housing costs, the rents paid have increased nearly 1.5 times faster than the maximum rate of the payment since 2001.
The authors write that two in three retirees who rent in the private market live in poverty, including more than three in four single women. Half of retirees who rent have less than $25,000 in savings, and a growing number of older Australians are at risk of becoming homeless.
“This problem is set to get worse. Home ownership is falling fast among poorer Australians who are approaching retirement. Between 1981 and 2021, home ownership rates among the poorest 40 per cent of those aged between 45 and 55 fell from 68 per cent to 54 per cent.
“Today’s low-income renters are tomorrow’s renting retirees. And whereas a third of retirees who rent today live in social housing, where rents are capped at 30 per cent of income, far fewer can expect to do so in future because there simply isn’t enough social housing to meet demand.”
The report was strongly endorsed by COTA Australia, an advocacy organisation for seniors, with chief executive officer Patricia Sparrow (pictured) saying the report strengthens ongoing calls for the government to provide a significant boost to the Commonwealth rent assistance scheme and for its methodology to be reviewed.
“The current system is allowing too many retirees to fall through the gaps,” Sparrow says. “Two in three retirees who rent live in poverty. That’s a shocking statistic that we can’t continue to ignore. For older single women the figure is even worse, with 80 per cent of single retired women living in poverty.
“The Federal Government needs to initiate an independent government-funded review of demand side housing assistance schemes, including the Commonwealth rent assistance scheme, as part of a suite of housing and cost-of-living policies.”
